If you think that $97 for crude in West Texas Intermediate or $110 per barrel for Brent Sea crude is getting too high, what would you say about a call for the old super-spike scenario?  Forget $150 per barrel…  Nomura has laid out the scenario for a spike of up to $220 per barrel.

Bloomberg and Reuters have given a highlight to this call.  It sounds ludicrous and it is based on a total export halt from both Libya and A
lgeria has OPEN nations would have a 2.1 million barrel per day deficit against total excess capacity of about 5 million barrels.

The assumption is that production would be hit like it was in the first Gulf War when oil more than doubled in 7 months.  The comment that is perhaps even more maddening is that Nomura noted that this $220 prediction may be understated due to fewer speculators and financial traders involved in 1990 to 1991.

What else is there to say?  As a reminder, this is an “If-Then” scenario rather than a “It is coming!” scenario.  What would that translate to at the pump?  $7.00 a gallon, or higher?

JON C. OGG